POST UTME VERITAS UNIVERSITY 2020 Accounting | Objective

Are you preparing for POST UTME VERITAS UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2020 Accounting (Objective) questions designed to simulate the real exam environment.

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Question 1
Determine the amount of depreciation expense for the year ended December 31, 2020, for a machine purchased on January 1, 2018, at ₦150,000, with a useful life of 5 years and a residual value of ₦20,000.
A. ₦20,000
B. ₦30,000
Correct C. ₦40,000
D. ₦50,000

Correct Answer: C

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Question 2
A company has the following transactions in its cash book: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash received from customers | ₦100,000 | | | 15 Jan | Cash paid to suppliers | | ₦50,000 | | 20 Jan | Cash received from bank | ₦200,000 | | | 25 Jan | Cash paid to employees | | ₦150,000 | What is the balance on the cash account at the end of January?
A. ₦50,000
B. ₦100,000
C. ₦150,000
Correct D. ₦200,000

Correct Answer: D

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Question 3
A partnership has the following capital accounts: | Partner | Capital | Drawing | Balance | | --- | --- | --- | --- | | A | ₦100,000 | ₦20,000 | | | B | ₦150,000 | ₦30,000 | | | C | ₦200,000 | ₦40,000 | | What is the total capital of the partnership?
A. ₦450,000
B. ₦500,000
Correct C. ₦550,000
D. ₦600,000

Correct Answer: C

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Question 4
A company has the following transactions in its bank reconciliation statement: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Bank balance | ₦100,000 | | | 15 Jan | Cheque deposited | | ₦50,000 | | 20 Jan | Bank interest | ₦5,000 | | | 25 Jan | Cheque issued | ₦150,000 | | What is the bank balance at the end of January?
A. ₦55,000
B. ₦60,000
C. ₦65,000
Correct D. ₦70,000

Correct Answer: D

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Question 5
A government agency has the following transactions in its accounting records: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Revenue | ₦100,000 | | | 15 Jan | Expenditure | | ₦50,000 | | 20 Jan | Transfer to another agency | ₦20,000 | | | 25 Jan | Receipt from another agency | | ₦30,000 | What is the net result of the transactions?
A. ₦20,000
Correct B. ₦30,000
C. ₦40,000
D. ₦50,000

Correct Answer: B

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Question 6
A company uses the straight-line method to depreciate its assets. If the asset's useful life is 5 years and its residual value is ₦0, what is the annual depreciation expense if the asset's cost is ₦120,000?
Correct A. ₦24,000
B. ₦20,000
C. ₦18,000
D. ₦22,000

Correct Answer: A

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Question 7
A company's trial balance shows the following balances: Accounts Payable ₦50,000, Sales Revenue ₦200,000, Cost of Goods Sold ₦150,000, and Common Stock ₦100,000. What is the company's net income?
Correct A. ₦50,000
B. ₦20,000
C. ₦30,000
D. ₦10,000

Correct Answer: A

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Question 8
A company uses the weighted average method to compute its inventory value. If the company has three types of inventory with the following quantities and costs: Type A (100 units, ₦50 each), Type B (200 units, ₦75 each), and Type C (300 units, ₦25 each), what is the company's total inventory value?
Correct A. ₦22,500
B. ₦20,000
C. ₦25,000
D. ₦30,000

Correct Answer: A

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Question 9
A company's balance sheet shows the following balances: Cash ₦50,000, Accounts Payable ₦20,000, Common Stock ₦100,000, and Retained Earnings ₦30,000. What is the company's total liabilities and equity?
Correct A. ₦180,000
B. ₦200,000
C. ₦220,000
D. ₦250,000

Correct Answer: A

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Question 10
A company's income statement shows the following balances: Sales Revenue ₦200,000, Cost of Goods Sold ₦150,000, Gross Profit ₦50,000, Operating Expenses ₦20,000, and Net Income ₦30,000. What is the company's gross margin percentage?
Correct A. 25%
B. 30%
C. 35%
D. 40%

Correct Answer: A

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Question 11
A company uses the straight-line method to depreciate its assets. If the asset cost ₦1,500,000 and has a useful life of 5 years, what is the annual depreciation charge?
A. ₦300,000
Correct B. ₦150,000
C. ₦75,000
D. ₦30,000

Correct Answer: B

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Question 12
A bank's cash book shows a balance of ₦1,200,000. The bank reconciliation statement shows a difference of ₦50,000 between the cash book balance and the bank statement balance. What is the correct balance according to the bank statement?
Correct A. ₦1,250,000
B. ₦1,200,000
C. ₦1,150,000
D. ₦1,250,000

Correct Answer: A

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Question 13
A government agency uses the accrual basis of accounting. If the agency receives ₦500,000 in cash and also receives ₦200,000 in accounts receivable, what is the total amount of revenue for the period?
Correct A. ₦700,000
B. ₦600,000
C. ₦500,000
D. ₦400,000

Correct Answer: A

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Question 14
A company uses the double-entry system of accounting. If the company purchases an asset for ₦1,000,000 and also pays ₦200,000 in cash, what is the journal entry for the purchase?
A. Debit Asset ₦1,000,000, Credit Cash ₦1,000,000
Correct B. Debit Asset ₦1,000,000, Credit Cash ₦200,000
C. Debit Asset ₦1,000,000, Credit Cash ₦800,000
D. Debit Asset ₦1,000,000, Credit Cash ₦1,200,000

Correct Answer: B

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Question 15
A company's ledger shows a balance of ₦500,000 in the asset account. If the company also has a liability of ₦200,000, what is the net worth of the company?
A. ₦300,000
Correct B. ₦400,000
C. ₦500,000
D. ₦600,000

Correct Answer: B

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Question 16
A company uses the double-entry system to record its transactions. The following journal entry is made: Debit Cash 1,000, Credit Accounts Payable 1,000. What is the effect of this transaction on the company's balance sheet?
A. The company's cash balance will decrease by 1,000.
Correct B. The company's accounts payable balance will increase by 1,000.
C. The company's cash balance will increase by 1,000.
D. The company's accounts payable balance will decrease by 1,000.

Correct Answer: B

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Question 17
A partnership has two partners, A and B. Partner A invests 10,000 and Partner B invests 5,000. The partnership earns a profit of 3,000. How much will each partner receive as their share of the profit?
A. Partner A will receive 2,000 and Partner B will receive 1,000.
Correct B. Partner A will receive 1,500 and Partner B will receive 1,500.
C. Partner A will receive 2,500 and Partner B will receive 500.
D. Partner A will receive 1,000 and Partner B will receive 2,000.

Correct Answer: B

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Question 18
A company maintains a cash book and a general ledger. The cash book shows a balance of 5,000, but the general ledger shows a balance of 4,000. What is the reason for the difference?
A. The cash book has been incorrectly balanced.
B. The general ledger has been incorrectly balanced.
Correct C. There is a discrepancy between the cash book and the general ledger.
D. The cash book has not been updated recently.

Correct Answer: C

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Question 19
A company uses the single-entry system to record its transactions. The following entry is made: Debit Sales 1,000, Credit Cost of Goods Sold 500. What is the effect of this transaction on the company's income statement?
Correct A. The company's net income will increase by 500.
B. The company's net income will decrease by 500.
C. The company's cost of goods sold will increase by 500.
D. The company's sales will increase by 500.

Correct Answer: A

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Question 20
A company's trial balance shows the following accounts: Cash 5,000, Accounts Payable 2,000, Sales Revenue 10,000, Cost of Goods Sold 5,000. What is the company's net income?
A. 5,000
Correct B. 10,000
C. 15,000
D. 20,000

Correct Answer: B

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Question 21
A company uses the weighted average method to value its inventory. The company has three types of inventory: raw materials, work-in-progress, and finished goods. The raw materials inventory has a cost of ₦120,000 and a quantity of 100 units. The work-in-progress inventory has a cost of ₦150,000 and a quantity of 50 units. The finished goods inventory has a cost of ₦180,000 and a quantity of 20 units. If the company uses a weighted average method with a weight of 0.4 for raw materials, 0.3 for work-in-progress, and 0.3 for finished goods, what is the total value of the inventory?
A. ₦150,000
B. ₦180,000
Correct C. ₦200,000
D. ₦220,000

Correct Answer: C

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Question 22
A company has the following transactions in its cash book: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 2022-01-01 | Cash received from customers | 100,000 | 0 | | 2022-01-15 | Cash paid to suppliers | 0 | 50,000 | | 2022-01-20 | Cash received from bank | 20,000 | 0 | | 2022-01-25 | Cash paid to employees | 0 | 30,000 | What is the balance of the cash account at the end of January?
A. ₦80,000
B. ₦90,000
Correct C. ₦100,000
D. ₦110,000

Correct Answer: C

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Question 23
A company has the following transactions in its bank reconciliation statement: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 2022-01-01 | Bank balance | 100,000 | 0 | | 2022-01-15 | Cheques deposited | 0 | 50,000 | | 2022-01-20 | Cheques issued | 20,000 | 0 | | 2022-01-25 | Bank charges | 0 | 5,000 | What is the adjusted bank balance at the end of January?
A. ₦120,000
B. ₦130,000
Correct C. ₦140,000
D. ₦150,000

Correct Answer: C

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Question 24
A company has the following transactions in its manufacturing account: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 2022-01-01 | Raw materials purchased | 100,000 | 0 | | 2022-01-15 | Labour costs | 0 | 50,000 | | 2022-01-20 | Factory overheads | 20,000 | 0 | | 2022-01-25 | Work-in-progress | 0 | 30,000 | What is the total cost of production?
A. ₦180,000
B. ₦190,000
Correct C. ₦200,000
D. ₦210,000

Correct Answer: C

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Question 25
A company has the following transactions in its trading account: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 2022-01-01 | Sales | 100,000 | 0 | | 2022-01-15 | Purchases | 0 | 50,000 | | 2022-01-20 | Returns | 20,000 | 0 | | 2022-01-25 | Discounts | 0 | 30,000 | What is the gross profit?
A. ₦40,000
B. ₦50,000
Correct C. ₦60,000
D. ₦70,000

Correct Answer: C

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